Now that you have gone through most of the journey of FX University, the following advice must be kept in mind.
Be your own dealer. Don’t blindly believe others’ trading opinions. Because some people use their own methods to trade very well, but this does not mean that these methods are also applicable to you. We have different views on the market, we have different thinking processes, risk tolerance and market experience.
You must have a personal trading plan and update your trading plan in time based on what you have learned in the market.
With solid principles, your transaction will look like this.
Formulating a trading plan and insisting on execution according to the plan are the two most important two of the trading principles. But the trading principle alone is not enough, even if there are reliable principles.
It must be a rock-solid principle. Repeat: as solid as a rock. Just like Jacob Black’s abs. The principle of being as plastic is not acceptable. The principle of straw and branches does not work either.
We don’t want to be piglets. We want to be successful traders.
Having rock-solid trading principles is the most important characteristic of a successful trader.
The trading plan determines what to do, why to do it, when to act, and what to do. It covers your trading personality, expectations, risk management standards and trading system. If you follow the trading plan, it will help you reduce the mistakes made in the transaction and minimize your losses. After all, if you don’t have a plan, it means you are ready to accept failure.
The trading plan eliminates wrong decisions made on impulse. When your money is in the water, your emotions consume your mind and cause you to make irrational decisions. You don’t want this to happen.
The best way to prevent this from happening is to reduce (note that we’re not talking about eliminating) impulsive thoughts by making plans that can respond to all potential market changes. With the right plan and every step planned, you don’t have to make any more decisions when you are impulsive. You just have to stick to your plan.
Before proceeding, we want to talk about the difference between trading plans and trading systems. The trading system refers to how you want to enter and leave transactions. The trading system is part of the trading plan, but it is only one of many important parts, such as analysis, execution, and risk management. Because market conditions are constantly changing, a good trader usually has to establish multiple trading systems in his plan.
Why do you have a trading plan?
Trading plans will make trading easier than when there is no trading plan.
When you think about using GPS to navigate your device, you only need to enter the place you want to go, and it can analyze your current location and then tell you how to get to the place you want to go. You can continuously verify whether you are on the right path through GPS. If you make a wrong turn, it will adjust accordingly and eventually lead you back in the right direction.
The trading plan is your trading GPS. It will tell you where you are as a trader, and then help you reach your destination: continuous profit.
It is not wise to embark on a journey without GPS. You don’t know how to reach your destination, you can only spin around like a headless fly. You think maybe you can use an ancient tool called “map” instead, but we don’t know what that is. Please stop making such ridiculous suggestions.
Trading without a trading plan is like driving without a GPS-a bad idea. You try to reach the paradise called “Continuous Benefits”, but you don’t know if you go in the right direction, and you may end up losing all your money.
With a trading plan, you will know if you are going in the right direction. You have a framework for measuring your trading performance. Just like with GPS, you can constantly monitor your performance.
This makes us less emotional and stressful when trading.
Without a trading plan, this is basically impossible. On the contrary, you will become a “cowboy trader”, acting recklessly, trading without going through the brain, relying only on your guts and strangers’ guessing and signal trading. That is not a transaction-it is gambling.
Every time you trade, you will be very nervous, out of control, and wash your face with tears, because your roller coaster account is tormenting your nerves. (Too dramatic, but I think you know what it is like.)
Just like you use GPS to find the driving route, determine the progress, your trading plan helps you determine the way to continue to benefit, and tells you whether you are on the right path.
More importantly, if you are not good at trading (as you would in the beginning), you know that this is caused by one of the following two reasons: there is a problem in your trading plan, or you did not insist on executing the trading plan. If you don’t have a trading plan, you don’t know what to take. You have no way to evaluate your results, nor can you know how to grow.
We can’t emphasize this too much… “If you don’t make a plan, you will definitely fail.”
Obviously a trading plan does not ensure success, but following a good trading plan, you will survive in the foreign exchange market longer than traders without a trading plan.
Survival is better than failure. This is your first goal as a novice. Remember, 90% of new traders cannot do this. You must want to be part of that special 10%.
You might think, “Liar! Trading plan? I can be that 10% without sticking to the trading plan.”
Blind trading may be good, but if you do not formulate a clear and clear trading plan and do not insist on following the contents, as a trader, you certainly cannot continue to benefit.